Sec Form 4 Filing - LI CHIANG J @ ARQULE INC - 2007-01-26

FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person LI CHIANG J 2. Issuer Name and Ticker or Trading Symbol ARQULE INC [ ARQL] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner X __ Officer (give title below) _____ Other (specify below) EVP, Chief Scientific Officer (Last) (First) (Middle) C/O ARQULE, INC., 19 PRESIDENTIAL WAY 3. Date of Earliest Transaction (MM/DD/YY) 01/26/2007 (Street) WOBURN, MA01801 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (Check Applicable Line) __ X __ Form filed by One Reporting Person _____ Form filed by More than One Reporting Person (City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned 1.Title of Security (Instr. 3) 2. Transaction Date (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities) 1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) 6. Date Exercisable and Expiration Date (MM/DD/YY) 7. Title and Amount of Underlying Securities (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares Employee Stock Options $ 4.6 01/26/2007 D( 1 ) 115,000 ( 1 ) 09/08/2013 Common Stock 115,000 ( 2 ) 0 D Employee Stock Options $ 4.6 01/26/2007 A( 1 ) 115,000 ( 1 ) 12/31/2007 Common Stock 115,000 ( 2 ) 115,000 D Employee Stock Options $ 5.36 01/26/2007 D( 3 ) 75,000 ( 3 ) 01/15/2014 Common Stock 75,000 ( 2 ) 0 D Employee Stock Options $ 5.36 01/26/2007 A( 3 ) 56,250 ( 3 ) 12/31/2007 Common Stock 56,250 ( 2 ) 56,250 D Employee Stock Options $ 6.31 01/26/2007 D( 4 ) 50,000 ( 4 ) 01/19/2015 Common Stock 50,000 ( 2 ) 0 D Employee Stock Options $ 6.31 01/26/2007 A( 4 ) 25,000 ( 4 ) 12/31/2007 Common Stock 25,000 ( 2 ) 25,000 D Employee Stock Options $ 5.73 01/26/2007 D( 5 ) 80,000 ( 5 ) 01/19/2016 Common Stock 80,000 ( 2 ) 0 D Employee Stock Options $ 5.73 01/26/2007 A( 5 ) 20,000 ( 5 ) 12/31/2007 Common Stock 20,000 ( 2 ) 20,000 D Employee Stock Options $ 6.17 01/26/2007 A 64,375 01/26/2007( 6 ) 12/31/2008 Common Stock 64,375 ( 2 ) 64,375 D Employee Stock Options $ 6.17 01/26/2007 A 12,500 ( 7 ) 01/26/2007( 6 ) 01/26/2017 Common Stock 12,500 ( 2 ) 12,500 D

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other LI CHIANG J C/O ARQULE, INC. 19 PRESIDENTIAL WAY WOBURN, MA01801 EVP, Chief Scientific Officer Signatures Robert J. Connaughton, Jr. by Power of Attorney for Chiang J. Li 01/30/2007 Signature of Reporting Person Date

Explanation of Responses:

( 1 )Amendment of outstanding option resulting in deemed cancellation of option and grant of replacement option. The option was originally granted on November 20, 2003 and provides for vesting in four equal installments commencing on July 2, 2003. The amendment will extend the post termination expiration date to December 31, 2007. ( 2 )Employee stock option grant. ( 3 )Amendment of outstanding option resulting in deemed cancellation of option and grant of replacement option. The option was originally granted on January 15, 2004 and provides for vesting in four equal annual installments commencing on January 15, 2005. The amendment will extend the post termination expiration date to December 31, 2007 for options that were exercisable and vested on the date of termination. As a result of the Reporting Person leaving the employ of the Company, the option grant lapsed as to the remaining 18,750 unvested options. ( 4 )Amendment of outstanding option resulting in deemed cancellation of option and grant of replacement option. The option was originally granted on January 19, 2005 and provides for vesting in four equal installments commencing on January 19, 2006. The amendment will extend the post termination expiration date to December 31, 2007 for options that were exercisable and vested on the date of termination. Pursuant to the Separation Agreement and Release, by and between the issuer and the Reporting Person forfeited the remaining 25,000 unvested options. As a result of the Reporting Person leaving the employe of the Company, the option grant lapsed as to the remaining 25,000 unvested options. ( 5 )Amendment of outstanding option resulting in deemed cancellation of option and grant of replacement option. The option was originally granted on January 19, 2006 and provides for vesting in four equal installments commencing on January 19, 2007. The ame ndment will extend the post termination expiration date to December 31, 2007 for options that were exercisable and vested on the date of termination. As a result of the Reporting Person leaving the employe of the Company, the option grant lapsed as to the remaining 60,000 unvested options. ( 6 )The options are fully vested and exercisable on the date of grant. ( 7 )The employee stock options were granted for service on the issuers Scientific Advisory Board.

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